Airline shares edge higher, gain 7.8% for the week

LauraMandaro

SAN FRANCISCO (MarketWatch) -- Airline shares closed higher Friday, a sweet end to a week that saw the sector rebound as Hurricane Dean's trek through the U.S. Gulf left oil production largely untouched.

The Amex Airlines index
reversed in afternoon trading Friday to climb 1.3% by the close, with eight of 11 stocks in the benchmark index rising. The sector got help from the broader market, which rallied on housing data. See Market Snapshot.

Among notable movers, shares of American Airlines' parent AMR Corp.
AMR
gained 1.2% and shares in Alaska Air Group
AMR, -6.74%
climbed 3.2%.

For the week, the Amex index rose 7.8%, making up ground lost the prior week, when the index retreated 5.4%.

Shares in United Airlines parent UAL Corp.
UAUA
closed up over 4%. The second-largest U.S. airline carrier said it is considering selling a stake in its maintenance division.

"We are contemplating bringing in third parties who can invest in the maintenance, repair and overhaul business," said spokeswoman Jean Medina via e-mail.

The operator's maintenance division employs about 6,900 people throughout its system, with the largest concentration of employees at the San Francisco maintenance base. See full story.

Crude oil prices also gained. Oil for October delivery climbed $1.26, or 1.8%, to close at $71.09 a barrel after touching a high of $71.05. Still, the contract lost 1% for the week as Hurricane Dean missed key production facilities in the Gulf. See Futures Movers.

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